Dan Frommer of Silicon Alley makes a post in which he admonishes Apple for not growing at the rapid clip it did last year. Here's a quote...

A year ago (and for several years before that), the Mac business was growing at a 20% to 50% clip. It was also rapidly gaining share in the personal computer market. It was a major factor in driving Apple's stock price toward $200, and it was scaring the pants off the rest of the PC industry.

This quarter, Apple's Mac business, measured by revenue, could shrink more than 10% year-over-year. And the company no longer appears to be gaining any share at all.

Let me tell you a little secret that everyone should know: Rapid corporate growth is a Bad Thing.

It seems like it defies logic but it really doesn't. As a company that's in it for the long term you don't want rapid growth because then everyone (like Dan Frommer in the article above) will start expecting you to grow that way in every quarter. Since that's impossible you're best to fight against rapid growth if you can.

What a company like Apple wants is steady, moderate growth.

Because they don't need the money. That's the most important part of this whole equation. There are only two things that rapid growth is good for and that's (a) to make money and (b) to make a company look successful to the outside world. But again, Apple doesn't need the money and they look successful just by steadily growing in sales.

So growing rapidly holds no allure for them.

With that said there is one more part of Mr. Frommer's article that I want to address. He gives a list of "growth drivers" that he thinks Apple should push more. Those are...

Failure to launch exciting new products. (The MacBook Air was the last big hit.)
Failure to play in the fastest growing segment of the market (netbooks).
Weakness in core markets: Education and media/creative.
Failure to make real inroads into the corporate world.
Failure to build a big international business.

Remember what I laid out above. Apple has plenty of money. What that means is they can afford, to a certain extent, to develop products that either don't make a profit or that make a very minor profit. That's an important point.

Apple can develop corporate products, start meager efforts in other countries and still live comfortably on the sales they do have. In doing so they can (a) iterate products without pushing them and (b) build a reputation for quality products in these sectors.

That allows them to continue building those businesses at a very slow rate while they get the growth they need from the sectors that they're focused on. Then, when those sectors become saturated they can turn their focus to the slower growing businesses and use them to create the steady growth they need in the future.

So pushing into every market at once would be a bad idea for Apple because they'd just be saturating markets they will need in the future (look at Microsoft's stock as an example of why this is true)

About Me

Not really relevant right now. This blog is on hiatus. I really haven't decided if it is an indefinite hiatus yet

For the record if you've tried to e-mail me over the last 4 to 6 months I didn't mean to ignore you. The e-mail forwarding isn't working and I didn't realize that until months worth of e-mails had been deleted on forward. The tom@tomstechblog.com address still won't forward to the postmaster account and I don't know why because it's provided by the webhost. But if you're one of my old blog pen pals I would always welcome an e-mail from you at the postmaster@tomstechblog.com address